Balance sheet reduction policy: Difference between revisions
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imported>Doug Williamson (Create page. Source: The Treasurer, Cash Management Edition April 2019, p15.) |
imported>Doug Williamson (Links ordering.) |
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* [[Monetary policy]] | * [[Monetary policy]] | ||
* [[Money supply]] | * [[Money supply]] | ||
* [[POMO]] | |||
* [[Quantitative easing]] | * [[Quantitative easing]] | ||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
Revision as of 13:53, 25 April 2019
Monetary policy.
In relation to monetary policy, balance sheet reduction is the opposite process from quantitative easing.
Balance sheet reduction involves a central bank reducing its holdings of financial assets, and its effect is to decrease the money supply.
The reduction can be achieved by allowing existing holdings to mature ('roll off') without replacing them.
The financial assets concerned are usually central government debt.
Balance sheet reduction is also sometimes known as 'quantitative tightening'.
